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Harvard's cooked, Jason. Harvard's
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cooked. Explain. It turns out, and
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there's been a lot of people that's
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posted about this on X, but there
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continues to be rampant Title 9
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violations with respect to admissions. I
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think Creme
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Nick, you can probably find it. I think
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he published one that Colombia was
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continuing to discriminate against Asian
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students. Harvard's original case was
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against Asian students. There was a
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bunch of woke stuff at other Ivy League
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schools like UPUPEN. There's all this
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rampant anti-semitism. It all needs to
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get fixed. And so I think that if you
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get a deal done, Harvard will have to
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capitulate. I think President Trump
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holds all the leverage and all the cards
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and there's nothing mathematically that
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Harvard can do. They can stall for
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probably another year and a half, but at
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some point they will not have the budget
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to sustain themselves and they're going
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to get into a huge world of hurt. What
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they will have to do in order to finance
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their budget in probably 18 months is
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start to actively sell their private
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equity portfolio, which by the way from
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2019 to this year almost doubled from 20
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to 40%. So, an insane asset allocation,
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frankly, an asset misallocation at the
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top of the market to the most illquid
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asset class. And when people sniff this
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out, what they're going to do is Harvard
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was able to sell a billion dollars
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recently of private equity stuff in
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managers that they didn't want to
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support anymore at a 7% discount.
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There is no smart money on the street
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that's going to look at any private
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equity portfolio from Harvard without
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asking for a 20 25 30 35 40% discount
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because your back will be totally
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against the wall. And if you don't ask
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for that, you're just a bad businessman.
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So if you put all of these things
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together, they're going to need to
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reestablish federal funding. But in
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order to do it, I think the president
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has been very, very clear and for
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whatever reason, they've refused to want
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to address these issues. But the Ivy
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League, there's just something
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fundamentally broken.
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Well, and Freeberg,
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the Wall Street Journal, reported on
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Wednesday that Harvard would face a
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billion dollar budget shortfall every
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year if Trump followed through on his
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funding cuts and tax hikes. He was also
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saber rattling that he would get rid of
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their nonprofit status or maybe change
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how the endowments worked. A lot of uh
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tools I think that he could deploy here.
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And uh
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there's an excise tax by the way in the
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BBB that taxes foundation assets. I
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don't know what the final language was,
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but there is a there was a version that
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I saw where excise tax on foundations
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was upwards of 8% a year. I don't know
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if that was the final version, but
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that's an enormous amount. Let's just
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say it's half that. Let's just say it's
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4%. But if you're paying 4% tax on your
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endowment every year, it all of a sudden
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starts to add up. That's like, you know,
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for Harvard like$2.5 extra billion
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dollars a year. that they have to pay.
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And uh Freeberg, reportedly Harvard is
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at the table and in discussions with the
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White House after a couple of months of
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defiance. What's your take on this? Is
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this an important priority for America
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and for the Trump administration? Is it
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a sideshow? What are your thoughts on
00:03:19
the larger ramifications of this?
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Let me just suspend the brand and
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history and legacy of Harvard for a
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second.
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Sure.
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And just talk about these
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call them prestigious higher education
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institutions. What are the two primary
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functions of these institutions? The
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first is to educate students and the
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second is to conduct research or to
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create facilities for research. Remember
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these institutions do not direct
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research. They recruit and enable
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researchers to apply for grants to get
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funding to do their research and then
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they educate kids. I think the internet
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was the first leg on the stool to break
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higher education.
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The internet democratized access to
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information and knowledge. You can watch
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MIT graduate courses. All of the core
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kind of educational content that is
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delivered in prestigious
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higher education institutions has been
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largely democratized and is broadly
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available for free on the internet.
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That's an incredible transition that's
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happened for humanity, for society, for
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the world. AI is the next leg of the
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stool to break. And I think that AI may
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actually break education. It may break
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higher education and then eventually it
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may make its way all the way down to
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childhood in terms of rethinking from
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first principles. How do we educate? How
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is an individual getting educated? And
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what are the other benefits they get
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from an educational system besides just
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core domain knowledge? There's also
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socialization and experience with
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project-based work. But I think that AI
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fundamentally rewrites the ability for
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an individual to get a good quality
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education. And we could see kids in
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Africa and kids in South Asia getting
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the equivalent of a Harvard graduate
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school degree at a cost of zero through
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personalized tutoring enabled through AI
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and the ubiquitous access to knowledge
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and information. So that core function
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of the university I think is broken and
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they're now starting to reconcile what
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that actually means for the long-term
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viability of all of these higher
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educational institutions in the United
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States. The research function I think is
00:05:27
also being rewritten around the world in
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Europe and in China and in Asia. There
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are independent research institutions
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that get research funding that can show
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up and say, "Hey, this institution is
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just being used to run research. It
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doesn't necessarily need to be within an
00:05:43
educational framework. It can be an
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independent research institution that
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focuses on either a topic or a domain.
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So, I do think we're going to see more
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and more independent research funding
00:05:52
happening with the grants that come out
00:05:54
from the federal government, from
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nonprofits, from endowments and
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foundations that fund research. So, I
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think that there's a real reckoning
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underway. It's almost like these guys
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have created a monopoly. They've
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accumulated this capital which allows
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them to build these great buildings,
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attract these great researchers, and
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then get the research funding to fund
00:06:11
those researchers, and then use that to
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raise more capital in their endowment
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and build the next building and keep
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this thing growing. And I think that
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that's breaking
